French PMI at cash
open showing a better than expected performance, clocking in at 46.1 in Services (more
important in France)
on a 45 forecast after 44.6. Manufacturing likewise better at 44.7 (fcst 44
after 43.7).

Flattish open,
ahead of German and EZ PMIs. Equities slightly biased to the upside, in absence
of dropping shoes, ticking up to be in line with the US close. No strong follow up to
the Asian session (given the advance already taken lately). EGBs flat (Bunds
1.43%) to slightly firmer, same for the Periphery (Spain 3.08% in 2s and 5.67% -3
in 10s, ahead of the auction later in
the morning, with auction papers quoted in line about 3 tighter than at
Wednesday’s close). Credit still tightening, tick by tick by tick.

Commodities more or
less where left Wednesday evening. EUR still firming up in the underlying ROn mood at 1.285.

German PMI split
with Manufacturing over consensus at 46.8 (fcst 46 unchanged), but Services
sluggish at 48 (fcst 48.3 after 48.4). Given the industry weight in Germany,
that’ll do. EZ PMI split, too, with the Composite at 45.8 (fcst 45.7
unchanged), Manufacturing better at 46.2 (fcst 45.6 after 45.4), but Services
at 45.7 (fcst 46 unchanged). Then again, given low expectations, this seems as
good as it gets.

This followed
(astutely) leaked news that Spain
had privately placed EUR 3.28bn 5 YRS recently at 4.792% (albeit, released
after the auction, with its own social security fund - and thus not with some
convinced real-money investor). No, no,
no… Spain
definitively not interested in putting an end to possible negative feedback
loops. Muddling to make the whole country TBTF. Seems to work, though..

In the meantime,
the hostage-taking strategy (Help me – or
I’ll blow up!) seems to be working fine with Greek 2023s hitting 16% and
2042s 13.25% (both 75bp tighter).

It’s probably what
Cyprus is up to as well when stating that differences with the Troika could be
bridged – and then breached.

Should this go on,
that would be a real reason for Core EGBs to remain under pressure with Germany and France as biggest paymasters on the
frontline, as this could be interpreted as a de-facto ex post mutualisation of
(past) debt.

Give it 25-30bbp
more bp, let’s say above 1.75% in Bunds and 2.50% in France, and suddenly the tone might
change.

Markets settled
comfortably on late morning levels, in foreseeable absence of (most) of the US
players during the afternoon session.

EUR happy to fly on
its own, staging a solo Risk On chant
to hit 1.288.

Commodities mostly
unchanged.

Not much on the
ticker. Quips of “united, we’ll manage” (on Greece), ahead of the (less
manageable) EU Budget summit.

Drifting during the
afternoon.

Free.

Bird.

Food.

Mood barely dented
by EZ Consumer Confidence sinking 26.9 (fcst -25.9 after -25.7), a new low in
the on-going slide (Latest high -9.8 in Nov 2010. Negative high 20s take us
back to Q2/2009).

Just closing the
afternoon. Not much more. Having braved the odds so far, the Periphery
tightened just a little more. EGBs mostly flat to a tick better after the
confidence data. France a tick softer. A bit of steepening. Schätze trading a
round zero.

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About Me

23 YRS of Euromarket... and counting
Crisis? What Crisis? (Supertramp, 1975)
Started my career on a syndicate desk during Gulf War 1 ;
traded an ECU Primary Book when the Danes said « No » ;
traded OATs during the big strikes in 1995 ;
was stuck alone in Aug 1998 trading 3m bills to 30 YRS bonds ;
did my biggest ticket in ECU in the second half of Dec 1998 ;
had a client issue and pull an inaugural bond on 9/11;
had a loaded Primary Book in summer 2008 ...
Hey, survived all of it :)
Europhile by birth & upbringing, turning EUR-sceptic...

Disclaimer

These are close of business market reviews with my daily, personal musings about the state of things (mainly EUR-centric).

Please bear in mind that this is no official research publication, nor sanctioned as such, and has no academic pretense at all (I DO try to be as thorough as possible, though…), but just a personal, trading desk view of things.

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A View From my Screens as such is not a licensed broker, broker dealer, market maker, investment banker, investment advisor, analyst or underwriter.

Views expressed on this blog are those of the contributors on a personal basis.